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Price & Time: Re-Test of the June Low in Store for Gold?

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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

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Foreign Exchange Price Time at a Glance:

USD/JPY:

PT_g_body_Picture_4.png, Price amp; Time: Re-Test of the June Low in Store for Gold?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY reversed last week during a key cycle turn window off the 50% retracement of the June to July advance in the 97.60 area
  • Advance has so far been halted by the 61.8% retracement of the May to June decline near 100.00, but while over last week’s cyclical low our near-term trend bias will remain higher in the rate
  • The 100.00 level is now a key upside pivot with strength above this level now needed to signal the start of a more important push higher
  • Near-term cycle studies suggest Wednesday is a minor turn window
  • A close below 97.60 would undermine the positive cyclical picture and turn us negative on the exchange rate

Strategy: Like longs while over 97.60.

USD/CHF:

PT_g_body_Picture_3.png, Price amp; Time: Re-Test of the June Low in Store for Gold?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CHF found support just below the .9245 6th square root progression of the year-to-date high during last week’s cycle turn window
  • Subsequent strength through the 1×2 Gann angle line has turned the near-term trend bias higher in USD/CHF
  • Advance has so far has been unimpressive and traction over the 61.8% retracement of June to July advance near .9365 is needed to trigger a more important run higher
  • Short cycles still look positive for another couple of days
  • Weakness below .9245 on a closing basis would undermine the burgeoning positive structure and turn us positive on the exchange rate

Strategy: Like the long side while over .9245.

USD/CAD:

PT_g_body_Picture_2.png, Price amp; Time: Re-Test of the June Low in Store for Gold?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CAD has moved steadily higher since bottoming ahead of the 78.6% retracement of the June to July advance in the 1.0240 area during last week’s cycle turn window
  • Strength through 1.0315 has shifted our near-term trend bias to higher in Funds
  • The 2nd square root progression of the year’s high at 1.0405 is a clear upside pivot with strength through here required to trigger the next leg higher in the rate
  • Near-term focused time cycles suggest Wednesday is the next minor turn window
  • The 3rd square root progression of the year’s high near 1.0300 is immediate support, but only under 1.0240 alters the positive technical outlook and turns us negative on the rate

Strategy: Like the long side in Funds while over 1.0240.

Focus Chart of the Day: GOLD

PT_g_body_Picture_1.png, Price amp; Time: Re-Test of the June Low in Store for Gold?

XAU/USD has come under steady downside pressure since failing at key symmetry in the 1348 area during last month’s important cycle turn window. The 2nd square root progression of last month’s high near 1280 has so far halted the decline and the how the metal reacts around this pivot over the next few days will likely determine whether a more important decline is in the offing. With the cyclical picture seemingly still negative for another couple of weeks a downside break is favored. At a minimum such a break should expose 1250/60. On the upside a move back through the 1st square root progression of the July high near 1317 would alleviate some of the downside pressure, but only over 1348 on a closing basis truly alters the negative technical structure and turns us positive on Gold.

Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

Looking for a way to pinpoint sentiment extremes in the Gold in real time? Try the Speculative Sentiment Index.

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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What’s inside:

  • EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
  • Resistance in vicinity of 11825/80 likely to keep a lid on further strength
  • Targeting the low to mid-11600s with more selling

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

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Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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